Being in debt isn’t necessarily a terrible thing. Between mortgages, car loans, credit cards, and student loans, most people are in debt. Being debt-free is a worthwhile goal, but most people need to focus on managing their debt first since it’s likely to be there for most of your life.

Handled wisely, that debt won’t be an albatross around your neck. You don’t need to shell out your hard-earned money because of exorbitant interest rates or always feel like you’re on the verge of bankruptcy. You can pay off debt the smart way, while at the same time saving money to pay it off faster.

DEBT FREE ZONE - FLOWOOD - MSFirst, you will need to assess the depth of your debt. Write it down, using pencil and paper, a spreadsheet like Microsoft Excel, or a bookkeeping program like Quicken. Include every financial situation where a company has given you something in advance of payment, including your mortgage, car payment(s), credit cards, tax liens, student loans, and payments on electronics or other household items through a store.

Record the day the debt began and when it will end (if possible), the interest rate you’re paying, and what your payments typically are. Add it all up, painful as that might be. Try not to be discouraged! Remember, you’re going to break this down into manageable chunks while finding extra money to help pay it down.

Some debts are more expensive than others.  Unless you’re getting payday loans (which you shouldn’t be), the worst offenders are probably your credit cards. Here’s how to deal with them.

DON’T USE THEM!  Don’t cut them up, but put them in a drawer and don’t use them unless there is an emergency.

Figure out which card has the highest interest rate and pay off as much as you can every month and pay the minimum amount on the others.  ALWAYS BE SURE TO PAY AT LEAST THE MINIMUM AMOUNT DUE.  And always make sure that you make all payments by the due date and NEVER miss a payment.  When that card is completely paid off then start working on your next credit card with the highest interest rate.

Do not close any existing cards and definitely DO NOT open any new ones.  Look over all your statements very carefully and cancel any recurring charge that you no longer need to pay.

One last thing that you can try, call your credit card companies and ask them very nicely to lower your percentage rate.  You can also make a payment plan with them that you feel comfortable with paying monthly.

Do whatever you can to save and to retire your debt.  Consider a second job and have that total income should go to pay off debt.  Substitute free family activities for high priced ones.  Sell high value items that you can live without.  Try to cancel all subscriptions, magazines, cable, etc.  You will be surprised what you can live without.  Instead of buying books go to the library.

To avoid increasing your debt, make it a habit to pay with cash or a debit card that comes straight from your account.  If you don’t have the cash for it, you probably don’t need it.  You will definitely feel better about what you do have if you know it’s owned free and clear. Try to use coupons as much as you can and shop wisely.

Each of these ideas, taken alone, probably doesn’t seem like much, but if you do them you will watch your debt decrease every month.  And that should make you SMILE!

If you need assistance with managing your debt, you can give us a call and we can help you come up with a monthly plan to decrease your debt comfortably to fit your needs.


BY: Raizy P. Grossman

Watkins & Company Debt Management

Jackson, MS

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